Tesco: confirms sale of mortgage portfolio unit

(CercleFinance.com) - Tesco on Tuesday confirmed that it has reached a deal to sell its mortgage portfolio unit to Lloyds Banking Group for 3.
8 billion pounds (approximately 4.2 billion euros) in cash.

The British retailer said the sale is in line with its strategy of focusing on a reduced number of products and services, while cutting operating and funding costs.

The proceeds from the sale will be used for re-investment and transformation of the business, it said. Tesco Bank has over 23,000 mortgage customers.

The mortgage portfolio has a lending balance of about 3.7 billion pounds and generated pre-tax profit of 9.1 million pounds in the past financial year.

In May Tesco announced its decision to stop new mortgage lending while exploring options to sell its mortgage book.

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